ERC hit for inaction on feed-in tariff payments

by Alena Mae S. Flores – May 12, 2017 at 09:28 pm

from Manila Standard Today

Senator Sherwin Gatchalian slammed the Energy Regulatory Commission for its “regulatory inaction” that has resulted in a P6.6-billion backlog payment to renewable energy developers in the form of feed-in tariff rates.

Gatchalian said the backlog in 2016 included interest payments amounting to P230 million under the feed-in tariff allowance, or FIT-All, a uniform charge collected from all power consumers as payment to renewable energy developers.

Gatchalian, chairman of the Senate Committee on Energy, said the ERC was slow in acting on the FIT-All applications of National Transmission Corp. aimed at augmenting its subsidy to eligible renewable energy developers and allowing it to pay its obligations.

“I hate to say it, but because of the delays of ERC, we will be paying P230 million in interest payments,” the senator said.

“That’s why I am quite adamant in getting a definitive timetable (or when the applications will likely be approved) from you [ERC] because I know that the amount will grow bigger,” he said.

Gatchalian said during the hearing of the Joint Congressional Power Commission on the status and implementation of the provisions of the Renewable Energy Act Wednesday that ERC’s actions did not bode well for investors.

“In line with attracting investors and promoting RE… we will never get serious investors if we don’t fulfill our contractual obligations, and FiT-All is one of them,” he said.

TransCo in December 2015 sought to increase the FiT-All rate in 2016 to P0.12 per kilowatt hour

Before the application can be approved, TransCo filed another one in December 2016, this time asking to further raise the rate to P0.22 per kWh.

ERC officials told members of the JCPC that the regulator was set to issue its final approval of the 2016 application on June 9.

The ERC is also scheduled to convene the first jurisdictional and expository meeting for the 2017 rate application starting Tuesday, and its approval by September 2017.

“These unwarranted delays in the ERC approval is the reason why Transco has not been able to pay the RE developers. And because of these delays, we have to pay consequential costs,” Gatchalian said.